Also, a GPS unit is relatively durable, so if I bought one last year, I have no need to buy one again this year. Combine these two, and it's easy to see a significant decline in sales, even without considering smart phones.
This. Beyond durability, they are more upgradable than ever. I bought a GPS unit that, in addition to purely fun stuff like customizing the voice and changing the car graphics, has upgradeable maps, all of this via USB. A family member recently ditched their old, non-upgradeable GPS unit for the same style that I have because the map in their old GPS was so out of date it was unusable. While they will have to buy new maps from time to time, it is unlikely that they will buy new hardware for a LONG time.
The release of firmware- and map-upgradeable hardware at a price within reach of average consumers is a fairly recent phenomenon...one that may even coincide with the this dip in hardware sales. Let's see how TomTom and Garmin's map update subscriptions are doing too, to get a full picture.